“The IMF bailout will save us”
Brian Lenihan and those members of the government that now defend the bank bailout are insisting that the funds from the IMF are like an overdraft. They will only be drawn upon should they be needed. These funds have been described by him as the“firepower that stands behind the banking system”, to protect us against the worst effects of the markets.
These markets’ rates of interest on loans to Ireland have been rising in the last few months so they become unaffordable we are told. So the question now is what interest rate on the IMF / EU bailout money is going to be charged? The level of debt being afforded to Ireland through this supposed bailout is so large that within a few years, the interest to be paid on it "will be consuming at least one in every five euro raised in tax within four years – and that’s before any fresh capital is put into the ailing banks".
In effect, the money that is being loaned to the Irish state (you and me too) to cover the speculations of private bankers and developers is unpayable. These loans are forever. So how will these loans be paid for?
In recent weeks, what is left of the government is planning to cut education programmes, wages, welfare payments and health services to help pay for this enforced indebtedness. The risk is for these loans is being handed over to those who had little to do with the massing of this debt: residents and citizens of Ireland. Instead of productively investing in Ireland’s future, this government, and more than likely the next, is committed to denying us all good health and a decent education for the sake of someone else’s stupid mistakes. Paul Krugman notes that even after the austerity of the last three years, "confidence just keeps draining away. And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers’ sins is worse than a crime; it’s a mistake."